Forward-Looking Statements This information and other statements by - - PDF document

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Forward-Looking Statements This information and other statements by - - PDF document

Forward-Looking Statements This information and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates


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Forward-Looking Statements

This information and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, margins, volumes, rates, cost-savings, expenses, taxes, liquidity, capital expenditures, dividends, share repurchases or other financial items, statements of management’s plans, strategies and objectives for future

  • perations, and management’s expectations as to future performance and operations and the time by which
  • bjectives will be achieved, statements concerning proposed new services, and statements regarding future

economic, industry or market conditions or performance. Forward-looking statements are typically identified by words

  • r phrases such as “will,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate,” “preliminary” and similar
  • expressions. Forward-looking statements speak only as of the date they are made, and the company undertakes no
  • bligation to update or revise any forward-looking statement. If the company updates any forward-looking statement,

no inference should be drawn that the company will make additional updates with respect to that statement or any

  • ther forward-looking statements.

Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by any forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by any forward-looking statements include, among others: (i) the company’s success in implementing its financial and operational initiatives; (ii) changes in domestic or international economic, political or business conditions, including those affecting the transportation industry (such as the impact of industry competition, conditions, performance and consolidation); (iii) legislative or regulatory changes; (iv) the inherent business risks associated with safety and security; (v) the outcome of claims and litigation involving or affecting the company; (vi) natural events such as severe weather conditions or pandemic health crises; and (vii) the inherent uncertainty associated with projecting economic and business conditions. Other important assumptions and factors that could cause actual results to differ materially from those in the forward- looking statements are specified in the company’s SEC reports, accessible on the SEC’s website at www.sec.gov and the company’s website at www.csx.com.

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Presentation overview . . .

 Earnings growth sustained in 10 of last 11 years

— Overcame energy transition; reflects strong network reach and balanced portfolio

 Strong EPS growth expected in the first quarter

— Still targeting double-digit EPS growth for full year 2015

 Service excellence strategy drives value creation

— Supports inflation-plus pricing, efficient operations and growth above GDP

 Merchandise/Intermodal now growing faster than GDP

— Broad-based strength and secular trends in intermodal and shale commodities

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Financial results top-tier across broader market

13% 9% 7%

CSX DJTI S&P 500 4

Operating Income CAGR 2004 – 2014

Top 23% among S&P 500

Margin Expansion (bps) 2004 – 2014

Top 7% among S&P 500

EPS CAGR 2004 – 2014

Top 12% among S&P 500

1,520 309 146

CSX DJTI S&P 500

20% 13% 8%

CSX DJTI S&P 500

Source: Datastream and IBES as of February 2015

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Earnings strong as energy transition stabilizes

$1.70 $1.79 $1.83 $1.92 $3.71 $3.19 $2.90 $2.85

2011 2012 2013 2014

EPS Coal Revenue in Billions $7.74 $8.25 $8.73 $9.40

2011 2012 2013 2014

Merchandise/Intermodal revenue grows $1.7 billion Record EPS despite nearly $900M decline in coal revenue

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Network/diverse portfolio drive sustainable growth

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New Orleans Memphis

Florida Piedmont Atlantic Gulf Coast Midwest

St Louis Chicago New York Boston Norfolk Jacksonville Miami

Northeast

Savannah Wilmington Tampa Mobile Baltimore Philadelphia Charleston Montreal CSX-served Ports Population Density GT 6M 3-6M 1-3M LT 1M 9% 6% 4% 6% 5% 1% 5% 4% 2% 13% 5% 18% 22%

2014 Volume by Market 6.9 Million Units

Chemicals Automotive Metals Agriculture Phosphates Food & Consumer Forest Products Minerals Waste & Equipment Export Coal Domestic coal Domestic Intermodal International Intermodal Consumer Goods Industrial Sector Agricultural Sector Construction Sector Energy Sector

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Volume increases 5% through first eight weeks

4% 7% 6% 2% 10% 0% Intermodal Industrial Sector Construction Sector Agricultural Sector Domestic Coal Export Coal

First Quarter Year-Over-Year Volume Growth

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Note: Volume data reflects shipments fiscal week 8 ending February 20, 2015

First quarter outlook supports full-year guidance

 Volume expected to be up about 3% for the quarter

— Cycling stronger prior year volume during the last five weeks of the quarter

 Strong EPS growth expected in the first quarter

— Recent weather impacting industry; WVA derailment estimated at $0.01-$0.02

 Strength in domestic coal and crude volume softening

— Domestic coal now expected to decline at least 5%; crude growth to moderate

 Targeting double-digit EPS growth; but more challenging

— Price, efficiency and merchandise/intermodal volume momentum are key drivers

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Above Inflation Faster than GDP

2.7% 1.3% 0.3%

2012 2013 2014 2015

Consolidated Inflation 3.6% 4.4% 5.9%

2012 2013 2014 2015

Volume Growth GDP

Service Excellence foundation for key value drivers

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Pricing Above Inflation

Same Store Sales Pricing Versus Rail Inflation

Grow Faster than GDP

Merchandise/Intermodal Volume Growth Versus GDP

Drive Greater Efficiency

Efficiency Savings Help Offset Cost Inflation

$197 $158 ($10)

2012 2013 2014 2015

Note: Inflation and GDP based on January 2015 IHS Global data; height of 2015 bars are illustrative only

Approaching $200M

Merchandise/Intermodal growing faster than GDP

3.8% 3.3% 2.7% 1.8% (0.3%) (2.8%) 2.5% 1.6% 2.3% 2.2% 2.4% 2.7% (4.5%) (1.4%) (3.9%) (5.8%) (14.3%) 13.5% 2.7% 3.6% 4.4% 5.9% (20.0%) (15.0%) (10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0%

2004 2009 2014

GDP Versus Merchandise and Intermodal Growth

GDP Merchandise and Intermodal

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  • - - - - - Freight Recession - - - - - - Great Recession - - - - - - - - - Economic Recovery - - - - - - - - -
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Long-term secular trends drive broad-based growth

Source: USDOT FHWA Freight Analysis Framework, Peak Period Congestion on National Highway System: 2040 Estimate

CSX Territory

Eastern U.S. highway congestion favors rail transportation long-term  Highway system already congested, especially in eastern United States  Freight demand in the U.S. projected to grow more than 50% by 2040  Trucking challenges generates growth opportunity for rail industry  Supply chains are lengthening and creating further growth opportunities  Reindustrialization of America driving secular growth above GDP

NW Ohio hub enhances intermodal connectivity

 Hub and spoke coupled with corridor lanes key differentiator

— Creates broader reach in eastern U.S. markets

 Approach combined with superior service drives growth

— Over 200 new NW Ohio lanes driving significant volume growth

 NW Ohio recently expanded 50% to drive further growth

— Supports new investments in Montreal and Florida markets

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Norfolk St Louis Memphis Philadelphia Wilmington Chicago Baltimore Tampa Mobile New Orleans Jacksonville Savannah Charleston NY/NJ Boston

Midwest Northeast Piedmont Atlantic Gulf Coast Florida

Montreal

2 2 2 3 4 3 2 2 2 2

  • Ft. Pierce

Miami

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Northwest Ohio Terminal Other Intermodal Terminals Currently Double-stack Cleared Double-stack Clearance in Progress

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Future opportunity aligns with CSX’s network

 Total eastern opportunity is about 9 million truck loads

— Reflects truckload moves greater than 550 miles

 Significant majority overlays CSX’s intermodal network

— H2R initiative designed to capture growth opportunity

 Investment required over time

— Scalable as volume increases

 Intermodal margins are on par with nearly all of Merchandise

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Traffic Density Originations Terminations Chicago St Louis Memphis New Orleans Mobile Tampa Jacksonville Savannah Charleston Wilmington Hampton Roads Baltimore Philadelphia NY/NJ Boston Montreal

Shale opportunities drive near-term growth

10 47 115 12 16 24 30 7 17

2011 2012 2013 2014

Shale Related Business Volume in Thousands

Crude Frac Sand LPG's

 Strong growth but limited exposure within portfolio mix

— Combined 2.3% of total volume

 Crude volume impacted by low commodity price environment

— Still expecting growth in 2015

 Frac sand and LPGs driven by Utica and Marcellus regions

— Continued strength expected 14 14 28 14 78 162

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Industrial development helps drive broader growth

 New or expansion projects on CSX totaled over 100 in 2014

— Nearly 600 over last five years

 Represents 160,000 carloads

  • nce projects are fully on-line

— Nearly 700,000 over last five years

 Customer investments have totaled $15 billion since 2010

— Creating long-term annuities

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2014 Customer Investments

Wrap-up . . .

 Sustained record of superior shareholder value creation

— Top-tier performance relative to the S&P 500

 Emerging from energy transition a stronger company

— Driving greater efficiency across coal, intermodal and merchandise networks

 Service Excellence is foundation for value creation

— Supports inflation-plus pricing, efficient operations, and growth above GDP

 Leveraging network reach and diverse business portfolio

— Expect Merchandise/Intermodal to grow faster than the broader economy

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